[In-depth] Cold Chain: How Is the “Pig” Riding the Trend Taking Off?

Key Takeaway:

 

1) China’s cold-chain logistics sector started relatively late but has experienced rapid growth. During this period of rapid expansion, two prominent models have emerged in the food‑related cold chain: integrated supply chains and cold‑chain LTL (less-than-truckload) services.

2) The massive volume of vaccine and nucleic acid‑testing reagent shipments generated by the pandemic has propelled the pharmaceutical cold chain to rapid growth, and many companies have begun significantly expanding their assets to meet this surge in demand.

3) Although growth is rapid, China’s cold-chain logistics sector remains in its early stages of development, with substantial room for future expansion. As the industry enters a phase of sustainable growth, companies must carefully allocate resources and manage costs to achieve higher returns and build stronger competitive barriers.

 

Amid the pandemic, most industries in China have plunged into a deep winter, yet one sector has gradually… It has “heated up.” Demand for COVID‑19 vaccines and testing reagents has surged, fresh‑food e‑commerce has expanded rapidly, and cold‑chain logistics has risen in tandem, catapulting the sector into the spotlight.

 

Cold-chain logistics “Three Questions”

 

1.1 Are the “Top 100 Cold Chain Companies” really that strong?

 

Recently, the Cold Chain Committee of the China Federation of Logistics and Purchasing released The “2021 Top 100 Chinese Cold‑Chain Logistics Enterprises” list. The companies on the list include brand‑owners, pan‑China‑coverage giants, long‑haul trunk‑line leaders, and regional delivery powerhouses—but how many of them have revenues exceeding RMB 1 billion? Are these top 100 really that strong? Compared with the cold‑chain behemoths in the United States and Europe, who’s the ant and who’s the elephant?

 

1.2 Can cold-chain urban delivery be systematized?

 

Most of China’s major cold-chain players are concentrated in certain cities, focusing primarily on last-mile delivery. But have these urban cold-chain delivery firms truly established their own service networks? For example, if a company handles cold-chain deliveries for Starbucks, can it also take on other clients? Is it Costa’s cargo? We’ve already set up cold-chain urban delivery for KFC—can we still take on McDonald’s orders?

 

From the end‑user perspective, cold‑chain last‑mile delivery points are essentially retail stores or individual vendors, with the latter typically using insulated foam boxes. + Cold‑pack delivery of ice cubes; so, in a landscape where retail outlets and branded foodservice operators remain fragmented, how can urban cold‑chain last‑mile delivery be systematized?

 

1.3 Can cold-chain LTL logistics be networked?

 

Although the cold-chain LTL model is quite popular and can generate higher profits, it essentially revolves around just a handful of wholesale markets nationwide. In other regions, there’s no reliable consolidation or delivery—so how could it possibly form a cohesive network?

 

Among general cargo LTL carriers, only Aneng has managed to, over the course of a year… It took moving 75 million tons of cargo to prove the business model and deliver profitability. By contrast, the cold-chain logistics market totals less than 100 million tons, and with such a fragmented supply landscape, how can network effects be cultivated?

 

Policy measures are being strengthened.

Cold-chain logistics has been launched. “The Road to Upgrade”

 

China’s cold-chain logistics sector cannot yet be said to have lost all hope. Over the past two years, thanks to policy support and industry efforts, China’s cold-chain logistics has already embarked on a new phase. “The Road to Upgrade.”

 

2.1 Although China’s cold-chain market started relatively late, it has already entered a fast-growth phase.

 

Compared with developed countries, China’s cold-chain logistics market got off to a relatively late start. Moreover, due to the fragmented nature of supply and demand and weak market regulation, most cold-chain goods were initially transported alongside general cargo, resulting in the absence of an independent cold-chain logistics system for an extended period.

 

In contrast to the gradual, incremental development seen abroad, China’s cold-chain logistics sector has experienced explosive growth in recent years. In 2021, the domestic cold-chain logistics transportation market reached RMB 155.64 billion, up 113.2% year on year compared with 2020; compared with 2016, the market size has more than doubled.

 

 

 

 

China’s cold-chain transportation market size, 2016–2021

 

 

2.2 Policy support has facilitated the development of cold-chain logistics.

 

Since the national economy entered a phase of steady growth, cold-chain logistics has been a key area of policy support, with a steady stream of relevant regulatory documents. For example, the National Development and Reform Commission’s initiative to develop logistics hub bases has provided robust infrastructure to underpin the expansion of cold-chain logistics. Meanwhile, the State Council and the National Medical Products Administration have established standards for facilities and equipment in pharmaceutical cold-chain logistics, mandating transparent data management at every stage—storage, transportation, and last-mile delivery—and leveraging real-time data monitoring to reduce loss rates during operations.

 

 

 

 

  Compilation of Support Policies Related to Cold-Chain Logistics, 2021–2022

 

2.3 The demand for cold-chain logistics is substantial, with transportation needs across different product categories corresponding to distinct operational models.

 

The demand for cold-chain logistics is enormous. For instance, most of the meat, seafood, and fruits and vegetables we consume in daily life require cold-chain transportation, as do many pharmaceuticals, laboratory reagents, and blood plasma. Differences in the flow of goods dictate that each product category has its own distinct transportation requirements.

 

Classification of Cold-Chain Logistics Products and Their Respective Distribution Models

 

Traditional pharmaceutical distribution channels are similar to those for general merchandise, which is why, for many years, numerous room-temperature drugs have been transported alongside ordinary goods. Meanwhile, high‑temperature‑sensitive pharmaceutical products such as blood, bone marrow, and vaccines are routed through disease control and reserve centers. The cold-chain logistics model for this category has become quite mature, and, influenced by the pandemic, it has also evolved into a distinct operational framework.

 

As for food products—whether fresh or frozen—various specialized less-than-truckload (LTL) services have emerged, tailored to different distributors and wholesale channels. /In the full‑truckload segment, there are even specialized options like refrigerated‑box transportation, enabling high‑speed delivery of general cargo directly to end consumers.

 

Cold-chain logistics is seeking a path to overtake.

 

As cold-chain logistics accelerates its development, the previously weak cold-chain infrastructure has been strengthened, and the entire logistics chain has undergone profound transformation. For example, integrated supply chains spanning from farm to table have emerged; cold-chain LTL services have surged in prominence; and the asset boundaries of warehousing and transportation firms are increasingly blurring.

 

3.1 The gradual standardization of the food cold chain is giving rise to less-than-truckload (LTL) cold-chain logistics.

 

Food cold chains are broadly categorized into two types: one is full-truckload transportation between cold storage facilities under the traditional distribution model, and the other is less-than-truckload (LTL) shipping that has emerged among frozen‑goods wholesale markets.

 

1) The impact of fresh‑food e‑commerce on distribution channels: integrated supply chains

 

China’s cold-chain logistics infrastructure is severely inadequate, particularly at the production stage, where pre-cooling facilities are lacking, and during transit and storage, refrigeration and supporting sorting and processing facilities are insufficient. Moreover, uneven development across regions leads to unavoidable losses throughout the supply chain.

 

As the online model of fresh‑food e‑commerce continues to evolve and China’s cold‑chain logistics system gradually improves, upstream brand owners are also progressively moving away from the traditionally inefficient multi‑tiered distribution network. Meanwhile, The “integrated supply chain” model for the food cold chain has also emerged, with numerous mid- and large-sized brands entering the fray and vigorously driving the “farm-to-table” approach.

 

Generally, brands either establish their own end-to-end logistics networks or partner with integrated cold-chain logistics providers such as SF Express and JD Logistics. They set up cold storage facilities and other pre-cooling infrastructure at production sites, strengthen cold-storage management at distribution centers, and standardize supply-chain processes to minimize product losses and enhance operational efficiency.

 

As early as In 2007, Haidilao established Shuhai Co., Ltd., building its own ingredient‑supply chain system. Subsequently, major brand owners entered the restaurant‑ingredient supply‑chain space one after another. Meanwhile, the “fresh‑e‑commerce boom” gave rise to B2B and B2C fresh‑food e‑commerce firms, which integrated cold‑chain logistics traditionally operated by distributors, all in pursuit of a seamless “farm‑to‑table” journey. Although offline channels still dominate fresh‑food consumption, this wave of fresh‑e‑commerce at least pried open a small opening for the subsequent development of the cold chain.

 

Integrated cold-chain supply chain model

 

2) Consolidation of frozen‑goods wholesale markets: Opportunities in cold‑chain LTL logistics

 

In recent years, the domestic frozen-food wholesale market has grown rapidly, with most frozen‑food trading hubs gradually evolving into conglomerates. Meanwhile, the development of frozen‑food wholesale markets has expanded from coastal ports to regions across the country. For instance, corporate groups such as Weierkang, Haibawang, and Gaoqi have established nationwide networks centered on frozen‑food wholesale operations.

 

However, the traditional full-truckload (FTL) transportation model is often one-sided: carriers either seek general cargo in the market or haul small‑batch cold‑chain shipments on their return trips, resulting in extremely low load factors and generally modest profit margins. As a result, many logistics companies located near major wholesale markets have shifted their focus to offering cold‑chain less‑than‑truckload (LTL) services centered around these hubs.

 

At present, cold-chain LTL services are primarily concentrated on intercity routes connecting large wholesale markets in first- and second-tier cities, such as Beijing, Shandong, Shanghai, Zhejiang, and Guangdong. Meanwhile, several regional short-haul cold-chain LTL operators remain active between urban agglomerations, including the Yangtze River Delta, the Pearl River Delta, the Beijing–Tianjin–Hebei region, and the Sichuan–Chongqing area.

 

 

Distribution Model of the Frozen Food Wholesale Market  

 

In addition, certain cold-chain products have varying transportation requirements at different stages. For example, seafood must be processed immediately upon removal from water to ensure proper handling. Products must be stored at temperatures below 20°C; after processing at the manufacturing facility, they require refrigerated storage and transportation. Fresh chilled meat, fresh fruits and vegetables, and similar products should be stored in an environment maintained between 5°C and 10°C. Additionally, frozen products such as frozen meat and ice cream must be stored at temperatures below –15°C.

 

Compared with the low load factor and high idle rates of full-truckload operations, cold-chain less-than-truckload (LTL) can deliver higher returns. However, the future ceiling of the cold-chain LTL model hinges on selecting appropriate vehicle types for efficient load planning and establishing well‑designed temperature‑zone segmentation.

 

3.2 The pharmaceutical cold-chain market is expanding in tandem with increasingly stringent transportation requirements, and end-to-end service providers are steadily establishing themselves in the market.

 

The pharmaceutical cold chain encompasses a wide variety of products, including medicines, vaccines, reagents, and medical devices, accounting for nearly… 95% of the pharmaceutical cold-chain transportation market; moreover, items such as blood, plasma, bone marrow, and cells that require ultra‑low temperatures necessitate an even more stringent cold chain for both transport and storage.

 

1) Billions of nucleic acid test kits and vaccines, driving a leap‑forward expansion of the pharmaceutical cold chain.

 

As of On August 30, the National Health Commission announced that a total of 343.2506 million doses of COVID‑19 vaccines had been administered nationwide, driving an exponential increase in demand for the pharmaceutical cold‑chain logistics market, which still has substantial room for growth. Prior to the pandemic, vaccine logistics were largely confined to the in-house systems of pharmaceutical companies; however, with the sharp surge in vaccine shipments, third‑party pharmaceutical cold‑chain providers have gained ample opportunities for expansion.

 

In addition, nucleic acid testing has become a routine requirement for epidemic prevention and control, which has in turn boosted the development of the cold-chain logistics sector, attracting many players offering last-mile cold-chain delivery services. With hundreds of millions of people undergoing daily nucleic acid tests, the utilization rate of cold-chain vehicles has improved, providing solid support for the growth of cold-chain logistics enterprises.

 

 

2) The asset boundaries between warehousing and logistics are gradually blurring, creating a robust pharmaceutical cold-chain barrier.

 

Let’s examine the asset dynamics of cold-chain enterprises. Successive policy documents issued by the state have introduced standardized reforms across the entire cold-chain value chain, creating favorable conditions for the sector’s growth. Accordingly, pharmaceutical cold-chain companies have also undertaken internal adjustments to align with these developments.

 

For example, pharmaceutical logistics companies that have long operated established trunk‑line fleets serving sales‑destination markets leverage their own capacity advantages to acquire land and build warehouses directly at those destinations, while also providing last‑mile urban delivery services to maintain temperature control across the entire supply chain. Meanwhile, pharmaceutical logistics firms specializing in last‑mile warehousing and distribution are expanding upstream—bolstering their own last‑mile delivery capacity and warehouse resources—while simultaneously taking on long‑haul trunk‑line operations.

 

Overall, pharmaceutical cold-chain logistics companies are shifting from operating at individual nodes to adopting an integrated, end-to-end operational model. This evolution in operational approaches also signifies the gradual blurring of asset boundaries between warehousing and transportation.

 

Cold-chain logistics Three Golden Tips for “Upgrading”

 

4.1 The cold-chain market is still in its early stages of development, and the benefits of innovation through trial and error far outweigh the advantages of settling for the status quo.

 

China’s cold-chain logistics sector remains in its early stages of development. Despite continuous policy support, the highly fragmented distribution of cargo sources has prevented the industry from achieving large-scale, organized operations, leaving the market still characterized by small, dispersed players. Only through deeper competition and consolidation can a fully developed cold-chain logistics system be established.

 

In addition, the relatively low penetration rate of cold-chain logistics in China is another hallmark of its early-stage development. Many food products that require a cold chain… /Pharmaceuticals are often transported mixed in with general‑cargo vehicles, and some are even shipped using flatbed or cotton‑blanket trucks. The ratio of actual cold‑chain cargo volume to the total cold‑chain demand is less than 20%.

 

Cold-chain companies are securing continuous financing, infrastructure is being steadily developed, and the cold-chain system is gradually taking shape—these are all key indicators of the industry’s healthy growth. As a relatively young sector, companies should not shy away from making mistakes; instead, they should embrace innovation to lay the groundwork for gaining greater influence as the industry matures.

 

 

4.2 Against the backdrop of a booming market, it is essential to focus on the long-term, rational allocation of one’s own resources.

 

The pandemic remains severe, and the sharp surge in demand for vaccines and nucleic acid testing reagents presents a rapid‑growth opportunity for the industry. At present, numerous pharmaceutical cold‑chain logistics companies have deployed substantial fleets of vehicles to meet the challenges of what appears to be a protracted battle against the virus. But should the epidemic situation evolve in the future, where will these vehicles go?

 

The underlying logic of logistics enterprise development still lies in resource allocation. Companies cannot simply expand their asset base to become overly asset‑intensive; without comprehensive planning, this often leads to oversupply, with a significant portion of assets going to waste or remaining underutilized, resulting in substantial losses. Therefore, in specific operational contexts, firms must strike a balance between asset‑light and asset‑heavy strategies, aligning transport capacity, warehousing capacity, and projected cargo volumes over an extended time horizon to maximize the return on each unit of capital and achieve sustainable growth.

 

4.3 Strengthen cost control as the scale of operations continues to expand.

 

In the future, cold-chain logistics is expected to maintain a steady growth rate. As companies expand their operations, their vehicle fleets and warehousing capacities will continue to grow, which in turn drives rising cost expenditures. Consequently, effective cost control and optimization will be critical to enabling cold-chain enterprises to achieve profitability.

 

Take vehicles as an example: a refrigerated truck typically incurs higher costs than a standard cargo vehicle—covering acquisition, operation, and subsequent maintenance.

Cost Comparison Between a 7.6-Meter Refrigerated Truck and a Standard Cargo Truck

 

A vehicle A 7.6-meter refrigerated truck, which requires an additional refrigeration unit at the time of purchase, can cost as much as RMB 80,000. Moreover, during operation, such vehicles typically consume about 20% more fuel than standard cargo trucks, and their annual insurance premiums can reach an average of RMB 13,000. In terms of routine maintenance, the refrigeration unit needs servicing every 500 operating hours, with each maintenance costing close to RMB 1,000; if it breaks down, repair costs can be substantial. Additionally, drivers in the cold-chain sector generally earn significantly higher wages.